You know what is fundamentally wrong with the European Project? You have a monetary union, but no fiscal union. When I look at what is going on in the E.U. and Greece getting blamed as the ultimate scapegoat it makes me take a long hard look at my own country, the USA. The main contrast between the EU and the USA when it comes to a single market with a single joined currency is that in my country we have a fiscal union with a central bank that will print money or in this case slap the fancy name of "quantitative easing" its way out of hardship. Europe can not simply print its way out of this recession as we can. However, devaluing our currency will eventually come with a price that I will end up paying for sometime in the next 30 years for the short term benefits of the here and now. I believe that Greece is going through a period of growing pains. Come what may by the March 20th deadline, but change is always painful, and not done welcomingly. My government can't even get our own house in order with the gridlock in the capital. The politicians here are not much better. Greece owes a few hundred billion euros. We owe 15 trillion dollars. Credit and financing here in this country was easy to get and cheap, the same in Greece. When the tap was finally turned off to that sort of access then the defects became evident because there was no longer the stream of money to cover it. I do not think Greece will be kicked out of the EU any more then I think that Rhode Island will be kicked out because it consistently runs a deficit. The European Project needs to be changed to include fiscal unions and programs or policy to include growth and reform, not austerity and reform. Greece will not shrink its way out of this mess, it needs the opportunity to grow out of it just like my country is attempting to do.

"not shrink its way out of this mess, it needs the opportunity to grow out of it"

As a fellow American, let me have a reply. Growth is fine - enact tax, legal, and licensing policies which benefit those businesses most likely to create jobs. If growth relies on spending, then you are simply digging the grave faster.

The "super-committee" failure to find the necessary spending cuts is a prime indicator of a Greek tragedy yet to come in America. 1 in 2 Greek young adults is unemployed. Is it surprising there are riots? 1 in 2 young adults unemployed in America, and you will have a real-life Escape from LA.

Fiscal discipline is hard. But if you cannot quit smoking, sometimes you just have to go cold turkey.

The ECB's practically unlimited loans for Eurozone banks against lousy collateral are so close to printing money as to be nearly indistinguishable. That's not such a big difference between the EU and US.

The US is as much in need of structural reform and austerity as most Eurozone countries - entitlement programs, simplification of taxcode, etc. But unlike the FED, the ECB is an independent political actor. So while very few politicians on either side of the Atlantic want to take the unpopular measures necessary to improve long-term economic prospects, the ECB can force them to take action, unlike the FED, which can only lick the politicians' heels.
Unfortunately, that does require an economic crisis. But I expect the reforms made now in the EU to more than pay off in the future.

In Greece the problem is corruption, nepotism and a dysfunctional bureaucracy are so deeply ingrained, the country is practically unable to implement even minor reforms - even after they've been approved by parliament.
It's not merely lack of political will, but lack of bureaucratical capability which haunts Greece.

...In Greece the problem is corruption, nepotism and a dysfunctional bureaucracy are so deeply ingrained, the country is practically unable to implement even minor reforms - even after they've been approved by parliament.
It's not merely lack of political will, but lack of bureaucratical capability which haunts Greece....

AmericanObserver: "my country we have a fiscal union with a central bank that will print money or in this case slap the fancy name of "quantitative easing" its way out of hardship".

. . . Once upon a time there was a country that had a fiscal union with a central bank that happily, happily, happily printed worthless paper money . . . until nobody in the world accepted these fiat-bubble-dollars anymore; then, this country couldn't even pay its heating bills and declared bankruptcy.

If you think that commodity producer and Central Reserve Banks will forever accept "a printed value" as IOU over a real value . . . then you are not in your right mind! China is already grinding the elimination axe.

I am not a greek, never actually been there, but it seems you have personal issues with this country and its people. You may want to seek some serious professional help if these issues keep you from sleeping in the night, or if that does not work for you, crawl back to the ugly cave you came from.

If delaying the inevitable is allowing other countries to sure up their finances and eventually disband from Greek contagion and EuroZone linking, then that's fine. Let them fish, give tours and retire at 55 on their own default and economic collapse.

It may not be a disorderly default but it's still a partial default for the creditors. If the CDS doesn't kick in because it's a "voluntary default" then there probably won't be much impact on the market come march 20. But given that the Greek economy rides on the government largesse's, a certain default is on the horizon. If Spain, Italy and Portugal don't prepare themselves then it might very well be the end of EU monetary integration.

If the Greek Parliament voted through and implemented pension payments as in the eastern EU (my ex office-lady gets about 200EUR/month compared to a reduced standard pension in Greece of over 600EUR!) and a retirement age after at least 45 working years then by all means help Greece. Otherwise, let them sink in their own mess. Yes, European banks who were foolish enough to lend the Greeks monies should be helped but not the borrowers.

It's ok dude, I know that being from the poorest victims of the EU all these years has made your hatred grow and grow, but this is how it is some are winners and some are losers, The Greeks had it all and now have nothing! why do you keep on this anti-Greek rhetoric? Obviously you are from the eternal losers, that never had many....but chill out...you will get over it

In the past two centuries Greece has defaulted on its sovereign debt 5 times. The current crisis will lead to the 6th of such occurrences. This allows the following conclusion: Greece defaults at least once, every generation.

The surprising fact to me is how blatantly ignorant both sides are: the creditors are still paying, the debtor is still spending.

Wasn't it G.B. Shaw who wrote: "If history repeats itself, and the unexpected always happens, how incapable must Man be of learning from experience."?

Interesting conclusion, but not entirely correct. Greece only defaulted once in the 20th century (in 1932 along with half of Europe), so practically no living Greek generation has ever defaulted. Among the 5 defaults you mentioned, one is before even Greece declared independence (and hence cannot be attributed to any Greek state), the second was caused by the German king Otto a year after independence and the third soon after (on the original 1830-32 loans issued for the upkeep of King Otto). You could say that Greeks have only defaulted once in the last 115 years (same as most EU countries) and that default was caused by an external crisis, similar to this one.

My point is that one can draw the lessons/conclusions one wishes based on their agendas/biases etc. I would suggest against drawing any generalisations without examining the facts behind the stats.

I guess only if you are Greek (seems like Kalamaia would be) you can attribute the current Greece crises to external factors. Grow up,for Christ's sake! Greek has been blaming its problems on others for hundreds of years, now. They have gotten so good at it that is really stands in the way of recovery, now.
Kalamaria, where do you want me to start: Corruption, even if you just want a doctor. Failed employer-union relationship. Failed, uncompetitive educational system. Lack of investment in R&D. Lack of administrative structures (not even a functioning registry of who owns which piece of land). Politics in the hands of just two families since the end of the second word war. Abysmal media, also in the hand of a few families - and used to their own ends. Total failure to implement tax system. The list of internal factors is endless. What does it take for the Greek to wake up?

This is true, For once, the common sense is emerging.
Defaults, are like hell to Christianity, without them, capitalist wont exist.
EU may wish to shield their own banks, but inevitable may have to happen, Germany and France will have to bite the dust and accept losses and recapitlise their own banks who lent money to Greece under a misguided opinion from Basel II, of Zero default probability.Default is the cheaper option.

I am afraid you may have missed my point and rather proven it with your response. My point was that you can use data or comments to draw the conclusion that fit your way of thinking, in your case to issue moralistic guidance.

You mis-interpeted my sentence that the current crisis was caused by an external crisis - that was meant to show the extreme conclusions you can draw from one piece of information(in this case # of defaults in Greek history). Indeed the crisis stems from internal factors, including the ones you mentioned - allow me to still suggest that the financial crisis post-2008 was the trigger that exposed the internal problems.

So - should I grow up or should you refrain from issuing paternalistic, moralistic comments such as the above? Should I draw conclusions about you as a person seeing the speed with which you responded in such a manner, and at the same time completely missing and misinterpreting my point?

It is too late now. Anyway Greece’s exports are roughly one third of its imports, so an exit and return to the drachma would have short-lived benefits since imported inflation would soar, eating out any gains in terms of competitiveness. So while Greece is better off with the euro, the question disguises the real issue: Rapid fiscal consolidation brings recession and a vicious downward spiral of unattainable fiscal goals. So long as this is not recognized by the troika of our lenders, and the public in the European countries that too easily brands Greece as a country were the citizens are “lazy” and not paying taxes, the question will be on the world frontlines, making a bad situation worse.

The thing is, if Greece had demonstrated goodwill by at least approving and implementing a large number of important structural economic reforms, help would most likely have been a lot more forthcoming.

For example, in 2010 the government under Papandreou approved measures to open the closed profession of trucking, but to date these have not actually been implemented.

It seems the Greek government simply lacks the capability to implement the reforms Greece needs.

Obviously Greece has major social and financial problems. We're too late in implementing changes in our market, our productivity, our social structure. We have all realised that.

What strikes me as unfair though is the almost fascist point of view that we have to be made an example. It would be useful for all the ignorant fools in here to go back in history and see how Germany dealt with it's own economic issues after WW1 and WW2. Loads of money were given by the US and the rest of the European states in order to achieve the "German miracle". Germany would not exist if it wasn't for the tolerant P.I.G.S. Greece was never paid reparations for the wartime destruction and Germany avoided paying even after its unification. In addition it was us and the italians and the spaniards and all the others who supported German economy by bying their products plus there was a lot of EU money channelled to making the German Union a succesful one after 1990.

IF WE APPLIED THE SAME RULES TO POST-WAR GERMANY, THERE WOULDN'T BE GERMANY! YOU GET THAT?

I hear the Dutch, the Fins and others EU politicians talking down to their Greek colleagues. How dare they; Their governments submitted to NAZI fascism! Never had to face the destruction and human suffering that were minimal in comparison to what happened here. In Greece 800.000 eople died fighting the war or out of starvation at the time. The economy was in ruins after the German occupation and forced loans. And before you say something stupid I'm telling you: This is not an excuse!

History repeats itself. Before you open your arrogant mouths for another stereotyped attack, THINK!!

Greece and its people are still proud. Adversity makes us stronger. We'll pull through like we did so many other times before cause we've been here much longer than anybody else. We just need some time and a fraction of the sympathy and assistance that were blank-checked to Germans when they found themselves in the shithole.

More questions than anything else - my knowledge of recent Greek history is scathy at best.... so apologies in advance if I am mislead.
Isn't it true that there was major internal unrest, akin almost to civil war Greece after WW2 - after the German's were gone? Isn't it true that it took till the eighties to return to democracy? Isn't it true that the civil service sector was blown up to appease the opposing groups of Greek society?
And one - admittely - sighlty provoking question ? How much money did Greece receive from the EU already since entering the club? I am not talking the recent bailouts, I mean all the subsidies from the European structural funds? Where have they gone and why have they not been translated into a flourishing economy?
Germany got help - in various forms - after WW2. They used it to get where they are now.
What has Greece done with the money she received - what do you have to show for it?
As always, reality is more complex than we all like to admit, especially if it contradicts our case.

Yes, you are quite right, after WW2 the Greeks killed each other to almost 1 milj. people. Well done fellows. For this reason you worked very hard, were well organised, but of course it was all “in vain”, it was another “Greek way of working”.

Now, to calculate the money Greece got from EU is impossible. Anyway, all that money is gone, it’s gone into the pockets of the government and it’s friends. The stolen money drips down the “hierarchy” from the minister down to the newspaper-sales-shop in the street, to the taxi-drivers, to the cleaning-maids in the homes.

Shall we make a calculation of how much money the government and it’s friends have stolen.
Estimate all the “un-taxed” money you can find with Greeks.
Many Greeks are “stupid enough” so you easily find them and you can see where the “un-taxed” money is, like in villas, houses, swimming-pools, cars, boats and property abroad.
If these “stupid Greeks” are “the tip of the ice-berg” they make up 10% and the others which are the clever Greeks make up 90%.

One stolen EURO (one EURO of “black money”) with a “stupid Greek” is also only 10% of what was stolen by the clever Greek.

Where do you finally end up, how much will it be, and it’s stolen year after year after year. I can't imagine how much. I would say enough to run a country like Greece.

To “learn the Greeks” to be honest, pay their taxes, allow “a little competition” between themselves in “real honest work like truck-driving” we throw some EUR 140 bn and let them give us a hair-cut of EUR 100 bn.

I think the Greek should count themselves lucky and be thankful Germany is still trying to save them. The Greek shouldn't lose hope. Look at South Korea 1997 and South Korea 2012. If the Koreans can do it then perhaps the Greek can too! But unfortunately with thinking like yours Greek will never be the next Korean powerhouse.

Yes, the Dutch just rolled over to Nazi fascism. That's why the Germans never invaded Holland. That's why the Dutch army didn't fight the German invasion (that never took place), suffering roughly 12,000 killed or wounded. That's why the Germans never bombed Rotterdam. That's why the Germans didn't lose 520 aircraft - which helped thwart their plans to invade Britain. That's why the Dutch didn't suffer the highest per capita death rate in the post invasion period of any European country. Yep, they just "submitted". Your grasp of history is as "sick", sick_boy, as is your grasp of economics.

the anglos blank-checked the Germans not you! but exactly your attitude is th ereason why you are where you are in hughe parts Africa for instance they keep on blaming the whites for their misery instead of getting it on..

I have read most of the comments bellow and all I am left with is the hatred people feel free to express when they think a nation is down and out. Well, it's only a matter of time now that we, the lazy and irresponsible Greeks got the punishment we deserved, to see what happens next. To the Italian lovers? Or maybe, the French and the Belgians? The British or the Swedish? And even the German people, someday soon. Please see http://www.reuters.com/article/2012/02/08/us-germany-jobs-idUSTRE8170P12...
Unless one has an in-depth knowledge and understanding of the turbulance and speculation going around in Europe and all around the world actually, it would be at his own best not to behave as a know-it-all hater. And maybe for a moment, turn off his tv set, browse through many internet news sites and think: is it really the way media present things to be? Am I any manipulated at all? Quoting a fellow reader, 'a “Greek-like” tragedy coming soon to a theater / country near you'.

True! That's all people my age fight against. That's why I cannot put up with mindless comments about all greeks lying lazy in bed awaiting to be served breakfast by the rest european countries. It's all my people's fault for voting dyfunctional political parties and never taking to trials all our corrupted politicians and public servants, misusing to their own benefit public money. Yet, people my age are hard working, educated people, tax paying citizens who cannot stand that all any more. But it really hurts to know other nations' people talk with such hate, without actually bothering to research any further than all the propaganda on tv and newspapers.

Please allow me to comment your comment to another commentator again: I am sure there are many hard working, educated people, tax paying citizens in Greece like you who cannot stand that all any more. But the anger of foreigners does probably come from the charades of your politicians and the misguided hate of Greeks against foreigners that you can witness in these bloggs for example ...

Hey Dear friend, it's you again! I will take the comment on the foreigners' anger coming from our politicians, yet I think you must be somewhat wrong quoting any hate behaviour (misguided or not)from greeks against foreigners. but, I think I will only be repaeting myself saying that we cannot carry on replying to each other like that on a blog. Unless you actually enjoy my posts that much. In that case, be my guest. Enjoy your day (or night, I do not know which place on earth you blog from..;) )

I enjoyed your comment very much, because it was exceptional in various ways. Whilst admitting there are elements of corruption in Greece, making the - often a point lost in recent discusions - important point, there are Greeks with integrity and hard-working.

However, as a non- Greek, so with a clear outsider perspective - a question?

How to help the hardworking, honest bunch without feathering the nest of the corrupt others? Or what has to change to make it possible, and who has to execute the changes?

Thank you for taking the time to read my comments and take them into consideration. This far, I have no answer to your question; I have been trying to reach one the last 10 years in my life. I believe things might change if people aged over 60 have no right to vote. Sounds non-democratic at all I know, yet people of that generation (my parents are that age I must point out)are mostly to blame for the corruption and selfish mindset that has been ruling in our society for the last 50 years. Trust me on this: most of the thousands of protestors on Sunday at Syntagma Sq., right before the riots broke out (which we could discuss about some other time), are of the same mentality as I am. Other than that, I only seek for some guidelines to help my country and my people get out of this mess. What about you, as a non- Greek, so with a clear outsider perspective, any suggestions? They would all be very welcome, as long as hate and mindless opinions are not a commentator's motivation. Thank you.

I lived and travelled in countries all around the world which were experiencing various levels of corruption and poverty. So as my guess of where Greece might be currently is heavily influenced by the press barrage of recent month, the following comes with the caveat – I might not know what I am talking about.

1) Fight corruption on every level where sensible. That usually needs to start with where one’s personal advantage is as stage, as being a beneficiary takes you hostage to perpetuate the system. This is the very long term cultural change, with only the very long-term effects, however, a necessary condition to start from the beginning. Today.

2) Get involved in local politics to give less active people a chance to follow.

3) Sort out property rights. Build – e.g. - a working land register ( I am afraid that might include facing the muddle of many Macedonians leaving after WW2, and I fear that’s why the last attempt to sort it out failed). That includes – get the tax collection sorted out – for everyone, not only for some. The latter will have to be accompanied by a lot of 1) – because it will burden the populace, it needs to be seem as fair – e.g. tax all the yachts – foreign and locally owned in Greece ….

4) Implement, as soon possible, and as ruthlessly as humanely possible all the reforms suggested – break licenses for truckers and taxis, hindrances to trade for pharmacies and lawyers, the whole bloody lot.

5) Default on the 20 March. Leave the Euro asap. Ask the Argentinean ambassador why restructuring does not work while in a deflationary spiral. Ask him as well what Argentina could have done better (avoid inflation, “optimised” statistics…..) and avoid it.
6) Ask the UN and the folks who managed the national reconciliation programmes in Africa what are the elements to put in place to re-unite the majority of the Greek populace and overcome internal strife. As a possibly wrong outsider analysis, in part the corruption currently experienced in Greece might be caused by the unresolved issues from the civil disparities of past years since WW2.

And let’s face it – Greece cannot afford disunity at this point in time.

Thank you for the suggestions above. They all make sense and I myself believe this could be a good start. I am not sure that politicians would dare to make all these changes though; first of all, because they would have to pay some fair taxes and to evade this, they have been passing laws for years.. So, fighting the corruption is really the first thing to do, but not an easy one.. I understand of course that unless some innovative, breaking through change occurs, my country will only suffer poverty and humiliation, right? So, besides those suggestions, the main question remains: what way could Greece implement all the above? I do not expect you or any other to have a solution to that huge problem; I am only pointing out how deep trouble that is..

This is just an outsider observation but it seems the Greek unions are quite powerful. While I don't particularly dislike organize union, actually I do feel they can be beneficial for workers' welfare, I think the unions in Greece holds tremendous power (socially, politically and economically). The real problem though is the haphazard way they wield that power to the detriment of the Greek nation and its people. While many here suggest reforms in the government and taxes I think without a visionary union leader it will be hard to achieve an economic miracle.

Highly recommened reading, and I would like to know how close it is to reality.

And one very harsh and brutal statement, well meant: If you do not trust your politicians to execute the list above - get rid of the politicians - as soon as possible.

No outsider can do it for you - you have to do it yourself. As misguided I consider the clumsy and self-interested German proposal of a budget commissoner, it serves as a brilliant example that there are things the Greeks have to do themselves if to avoid humiliation.

The list needs to be executed, (and much more) - there is no way around.

Did you know there was a bunch of senior German tax authority staff kicking heels in Athens for month, not being allowed to help?

How to implement the list - a there is a fine line between pride and humiliation, of outside help and interference to tread....

the best would be to find untainted specialists of possibly Greek origin - or enthusiastic locals that are willing to accept constructive assistance to reform - may be the OECD/UN can help, however, the main thing, is uniting Greeks to accepts that always everything has to change - a very tall order.

@ TE

the system is patchy when I write replys before logging in...... can you please fix it?

Dear friend, your statement above seems that would help greek people start fresh. Yet, when we take to the streets demanding from our politicians to quit, all that happens is that police forces attack people protesting. Masked policemen acting as rioters, clash with citizens and officers. And then comes the chaos. As it did last Sunday. I know it sounds crazy, but it is true. It is outrageous actually. I could even post links to some photos depicting. On the other hand, there is a fine line between outside help and interference, like you said yourself.. Anyway, I read some of the article you posted, but given that I am not a native english speaker, I will need more time to read it through. So far I need to say that as described, it is not far from reality. I will be back to you, having read the whole article; and let you know my honest opinion. Thank you once again for discussing (in a respectful way, contrary to what most people do lately) your point of view and really taking into some consideration mine.

Dear friend, your suggestion would be a lot more than just a start, if ever implemented.. All parliament members are supposed to publish online a transparent financial statement, regarding all assets they possess, as well their close family members. Try clicking on this link: http://www.hellenicparliament.gr/error500.aspx?aspxerrorpath=/Organosi-k...
That's the parliament's online site link that parliament members' financial statements for 2009 are supposed to have been published. It was made public on December 20th, 2011 and as you can see for yourself, it doesn't work! Besides that, all that report included was less than half of their assets and no explanation on the way these assets came to their possession.. You see, these policies apply not when it comes to a greek minister or parliament member, or a public servant..

@Courtjester:
-Good question, here are some suggestions
One of the troika proposal is actually to the point on this one:
As it is now, if you do report corruption, the guy you report can take you to courts. Because the courts are a tossup, there is a very real possibility that the corrupt guy will be vindicated
and the do-gooder will be indicted. That is in addition to
having a huge cost in time and money to do the job that the state should have been doing. So if the troika will want to have a say in financial issues, they might as well have a say in corruption issues. I would be extremely reluctant to give them rights to substitute the courts because a number of their demands are insanely illegal in any country.
-If one will ask people to live on 400euro a month, you cannot have a president who makes more than Obama, the bank of greece director making 4M/year and MPs making 150000/year or more.
So it is imperative to demand accountability, e.g. who is responsible for the debt. If pensioners eraning 500 euros/month
must take a hit, surely people who were involved in the decisions that brought the country here should take a much bigger hit. The only problem is that many of them are still in the government.

Points 1 & 2: Greece has the lowest level of household debt in the 30 odd countries that comprise the OECD. So, no, your racist stereotype that Greeks bought luxury cars and houses they could not afford through cheap EU loans are wrong.
Point 3: Average retirement in Greece is 61.5 years, 0.2 higher than EU average. Again stop with the racist stereotypes. Crises demand calmness and clear mind, not populism and easy slogans.
Point 4: Seriously? Half EU countries divide annual salary in 14 installments. This is a fiscal policy aimed to reduce pension burden (since pensions are calculated on monthly salary) and increase consumption around holiday periods
Last point: They are burning to express their disagreement on who bears the burden of the fiscal consolidation taking place, not whether austerity should take place or not.

Wait, Greece has the lowest level of household debt in the OECD? So where are all the poor greeks who riot in the streets coming from, then? You mean, they actually have money in their pockets?

The average retirement age may be 61.5, but what´s important is the median. Only 31% of greeks between 55-59 are still working, whereas in Germany, for example, it´s 64%.

The problem with this is it neglects the huge amount of fully paid, early retirements for all the greek state employees (and Greece has many of them), subsidized for years by borrowed money, building an extremely expensive, bloated, and thus, ineffective, bureaucratic apparatus (corrupt, of course), whose only purpose is to satisfy the voters and keep the even more corrupt elite in power.

I don't see the connection between low levels of household debt and the poor Greeks that are hardest hit by the austerity. No, they did not borrow money to buy luxury goods and of course they do not have nay money now.

The median retirement age would probably be higher (since extreme values that affect the average are more on the lower side, the upper limit being 65). Interesting statistic you brought up there (it would be great to see the source) indicating a problem of low labour market participation, which is indeed the case especially among women.

Absolutely agree on your last point which makes the crucial distinction that sometimes is omitted in other comments; that between public and private sector. The Greek public sector and its relationship with the political elite is the root of the problems Greeks are facing right now.

They need to temporarily mutualise debt but Northerners seem quite content to let Greece recoil in pain until it gives up of their own fruition rather than Northerners coming off as brash. This probably came about because other Southern and Western Europeans like the Spanish and Irish seem to have their houses coming into order. I'm not sure if this was a work of a legerdemain or just dumb luck.